Age UK: Could The Green Deal Defend From Fuel Poverty?

By Monique Wessels

The price of energy will always be a significant issue because having enough warmth is essential to the well being and health of older people. When you reach a certain age, being cold becomes more than a matter of comfort; it poses a serious health risk as well. The Department of Health, along with scientific literature, supports this stance because of the terribly high number of winter deaths in the UK alone. Cold is a matter that is currently costing social care services and the NHS more than one billion pounds a year and there are presently over fifteen times more deaths occurring in winter that are considered preventable than happen on the roads every year.

It can thus be understood why there is such a huge public concern regarding how transparent energy bills and rates are made. The media reacts with suspicion every time there is an energy price hike and households that are classified as low income homes are seriously worried that the next price increase might plunge them into a state of fuel poverty.

An announcement from the prime minister last week created much confusion when he iterated that power companies were going to be forced to offer their customers the lowest tariff available. The problem is that it is quite difficult to ascertain with any objectivity on the matter what exactly the best energy rate would be because different choices are made by different people where what good tariffs and methods of payment should look like.

There are those who would be happy to pay a bit extra to receive only green energy, while others might want security with fixed tariffs over a certain period. Some consumers choose to make use of prepaid power meters and others donít like the idea of direct debits on their accounts that pay for their energy usage. When considering older households, many of them cannot use or donít have access to online billing and accounts. It is clear that the cheapest tariff is not necessarily the best one and this is why Age UK backs Ofgemís process of simplifying tariffs.

One of the complicating factors where pricing of energy is concerned is the amount of varying elements that are placed under one umbrella called an energy bill. The British government has made matters worse by enforcing obligations for power suppliers whereby they are responsible for expenses of benefits as well as social policies like the Warm Home Discount and other initiatives that are said to encourage energy efficiency. The sad news is that once Warm Front comes to an end in the coming year, no programs exists to deal with the matter of fuel poverty that will be funded publically. Whatís worse is that the cost of the help promised by the government will have to be carried by power suppliers and they will come by these funds by raising prices for all, including those in fuel poverty.

In May of this year, it was shown by Ofgem that a total of 54% of a standard energy bill shows the cost of energy and about 23% pays for transmission and distribution. The government takes 5% in VAT and obligations surrounding social and environmental matters come to 10%. Things are pretty much the same when it comes to gas bills as well. Huge investments will have to be made by power companies over the following two decades just to ensure the lights stay on because of the big plans involving renewable energy sources as well as distribution networks being modernized. Green energy comes at a greater cost Ė using power generated by an offshore wind farm for instance, will require a new grid be created so that it can be properly distributed. Added to this is the cost of the program where homes have to be converted to smart meters. An estimated twelve billion pounds will be carried by energy companies between now and 2019.

The cost of energy is unlikely to decrease on a global scale because of developing countries having a growing demand for fossil fuels that are becoming less and less. Another thing counting against lowering fuel prices are the massive investments that are required by the industry. The price of energy in the UK is of the lowest in all of Europe, while the individual household bills make up some of the highest. The main reason for this anomaly is that the housing stock is of poor quality and therefore not energy efficient. If insulation in homes is improved and things like dated heating systems and boilers replaced with modern versions, things will look up. This transformation should then be a big priority because it will form the smartest solution to safeguard homes from rising prices and resulting fuel poverty.

This is what brought about the Green Deal, which is a program created to enhance British building stock so that it is more energy efficient. Questions abound as to whether it will work or not because there are some who have concerns about people living in fuel poverty having to use the money they save thanks to improvements on energy efficiency to add to their warmth, meaning that they donít really save any money at all. Part of the Green Deal has this in mind with the Energy Company Obligation, which states that payment will be made upfront for improvements on energy efficiency for specific homes and no repayments will be required. However, this allowance has been greatly curtailed by the government at a modest amount, leaving campaigners and Age UK feeling that they are not recognizing the true urgency of the matter of fuel poverty.

As a result, proposals in the upcoming Energy Bill calling for greater levels of transparency in the energy sector will be supported by Age UK. Making the new development work would be the most significant thing that can be done. Local energy efficiency has to be improved and this is where the focus should lie instead of diverting all attention to the Green Deal program that is yet to be tested. The government would be the hero in the story if the program is successful because it would lower the cost of energy permanently, create jobs in the heating and building sectors and progress the country on its path to meeting its commitments where reduction of carbon emissions is concerned.

In the meantime there are more than three million homes living in fuel poverty and having to deal with discomfort, ill health and for the most defenseless out there, even death. The responsibility of improving the situation has been passed to power companies and they in turn have passed it on to the government, making it part and parcel of public health changes as well as new Health and Wellbeing arrangements. The three million homes living in fuel poverty deserve so much more than the untested Green Deal program.